Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Concerning the Automated Customer Account Transfer Service Account Transfer Process for Insurance and Retirement Products

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<title>Federal Register, Volume 91 Issue 210 (Monday, November 2, 2026)</title>
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[Federal Register Volume 91, Number 210 (Monday, November 2, 2026)]
[Notices]
[Pages 68998-69001]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22259]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106751; File No. SR-NSCC-2026-011]


Self-Regulatory Organizations; National Securities Clearing 
Corporation; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change Concerning the Automated Customer Account Transfer Service 
Account Transfer Process for Insurance and Retirement Products

October 28, 2026.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 16, 2026, National Securities Clearing Corporation 
(``NSCC'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the clearing agency. 
NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(4) thereunder.\4\ The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(4).
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I. Clearing Agency's Statement of the Terms of Substance of the 
Proposed Rule Change

    The proposed rule change amends the NSCC Rules & Procedures (``NSCC 
Rules'') concerning the Automated Customer Account Transfer Service 
(``ACATS'') account transfer process for insurance and retirement 
products.\5\
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    \5\ Capitalized terms not defined herein shall have the meaning 
assigned to such terms in the NSCC Rules, available at <a href="http://dtcc.com/legal/rules-and-procedures">dtcc.com/legal/rules-and-procedures</a>.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included 
statements concerning the purpose of and basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. The clearing agency has prepared summaries, 
set forth in sections A, B, and C below, of the most significant 
aspects of such statements.

[[Page 68999]]

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to amend the NSCC Rules 
to discontinue certain ACATS functionality for transmitting information 
necessary to re-register insurance products (e.g., annuities) through 
NSCC's Insurance & Retirement Solutions (``I&RS'') service and transfer 
responsibility for insurance product registration and confirmation to 
NSCC's I&RS services system.
    The proposed rule change is discussed in detail below.
Background
ACATS Overview
    ACATS is a non-guaranteed service provided by NSCC that enables 
Members to effect transfers of customer accounts among themselves. 
ACATS complements Financial Industry Regulatory Authority (``FINRA'') 
Rule 11870 regarding customer account transfers, which requires FINRA 
members to use automated clearing agency customer account transfer 
services and to effect customer account transfers within specified time 
frames.\6\ ACATS automates and standardizes procedures for the transfer 
of assets in a customer account, allowing Members to efficiently and 
automatically enter, review, and generate instructions to settle 
customer account transfers. The timing and procedures with respect to 
ACATS customer account transfers are intended to be consistent with the 
timing and processes set forth in FINRA Rule 11870.
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    \6\ See FINRA Rule 11870, available at <a href="http://www.finra.org/rules-guidance/rulebooks/finra-rules/11870">www.finra.org/rules-guidance/rulebooks/finra-rules/11870</a>. NSCC also permits Qualified 
Securities Depositories (i.e., The Depository Trust Company 
(``DTC'')) to utilize ACATS on behalf of their participants (e.g., 
DTC member banks) on a voluntary basis. See Section 1 of NSCC Rule 
50, supra note 5.
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    ACATS provides functionality for account transfers that include 
I&RS Products such as annuities (referred to as the ``ACATS/Insurance 
Processing Service'' or ``ACATS/IPS'').\7\ ACATS/IPS automates the 
changes in distributors of record for an annuity when clients transfer 
their accounts from one brokerage firm to another. ACATS/IPS enables 
distributors to include annuity assets, along with other securities, 
when transferring accounts and gives them automated, timely access to 
important information about their customers' portfolios. The service 
also facilitates representative of record and broker-identification 
number changes within a contract.
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    \7\ See <a href="http://www.dtcclearning.com/products-and-services/insurance-retirement-services/acats-ips.html">www.dtcclearning.com/products-and-services/insurance-retirement-services/acats-ips.html</a>.
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    ACATS is primarily described in NSCC Rule 50 and Procedure XVIII of 
the NSCC Rules.\8\ Pursuant to NSCC Rule 50, an NSCC Member to whom a 
customer's account will be transferred (the ``Receiving Member'') 
initiates the transfer by submitting a transfer initiation request to 
NSCC, which contains the customer detail information that the NSCC 
Member who currently has the account (the ``Delivering Member'') 
requires to transfer the account.\9\ The Delivering Member must either 
reject the customer account transfer request or submit detailed 
customer account asset data to NSCC.\10\ NSCC then provides a report 
detailing the customer account asset data to the Receiving Member,\11\ 
who has one business day after receipt of the report to review the 
account and: (i) accept all assets; (ii) reject one or more assets, to 
the extent such a rejection is permitted by the Receiving Member's 
Designated Examining Authority (i.e., FINRA), and allow the transfer of 
the remaining assets; (iii) request the Delivering Member to make 
adjustments to the customer account asset list; or (iv) reject the 
account, to extent such a rejection is permitted by NSCC or FINRA.\12\ 
Once a customer account has been accepted by the Receiving Member, 
ACATS facilitates the settlements associated with the account transfer 
at the appropriate asset settling location (e.g., through NSCC's 
Continuous Net Settlement system (``CNS'') for CNS-eligible securities, 
DTC for securities otherwise eligible for DTC settlement services, 
Fund/SERV for eligible mutual fund products, or I&RS for annuities).
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    \8\ See NSCC Rule 50 (Automated Customer Account Transfer 
Service) and Procedure XVIII (ACATS Settlement Accounting Operation) 
of the NSCC Rules, supra note 5.
    \9\ See Sections 2 and 3 of NSCC Rule 50, supra note 5.
    \10\ See Section 5 of NSCC Rule 50, supra note 5.
    \11\ See Section 7 of NSCC Rule 50, supra note 5.
    \12\ See Section 8 of NSCC Rule 50, supra note 5. Pursuant to 
FINRA Rule 11870(d)(8), a Receiving Member may reject a transfer of 
account assets in whole if the account is not in compliance with the 
Receiving Member's credit policies or minimum asset requirements. 
See supra note 7.
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    Currently, Members utilize ACATS to both identify insurance 
products (primarily annuities) to be included in an account transfer 
and to manage the registration changes for those assets with broker-
dealers and insurance carriers. Pursuant to Section 8 of NSCC Rule 50, 
if I&RS Eligible Products (or ``I&RS Products'') are to be transferred 
the Receiving Member shall, within one (1) Business Day after receipt 
from NSCC of the report detailing the I&RS Products data or 
simultaneous with the submission of an acceleration instruction, submit 
to NSCC detailed transfer instructions, which are processed through 
I&RS in accordance with Section 6 of NSCC Rule 57.\13\ Each day NSCC 
also produces a report to the Receiving and Delivering Member, 
indicating the I&RS Eligible Products transfers which have been 
confirmed or rejected by the Insurance Carrier/Retirement Services 
Member in accordance with Section 6 of NSCC Rule 57, or which have been 
deleted.\14\ NSCC is proposing changes to Section 8 of NSCC Rule 50 in 
connection with the proposed enhancements discussed herein.
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    \13\ See Section 8 of NSCC Rule 50 and Section 6 of NSCC Rule 57 
(Insurance and Retirement Solutions), supra note 5.
    \14\ See Section 8 of NSCC Rule 50, supra note 5.
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Proposed Changes
    NSCC proposes to modify the NSCC Rules to enhance the account 
transfer process for I&RS Products. As discussed above, ACATS is 
currently responsible for both identifying insurance products to be 
included in an account transfer and managing registration changes with 
broker-dealers and insurance carriers. NSCC proposes to enhance this 
process by transferring responsibility for insurance product re-
registration and confirmation to NSCC's I&RS services system. ACATS 
would continue to allow firms to initiate and submit insurance assets 
for transfers but would pass those assets on to the I&RS system to 
complete the transfer process. The proposed change would streamline and 
simplify operational processes for Members by aligning the ACATS 
process for account transfers to the standard operational process used 
for insurance product re-registrations in the I&RS service.
    Under the proposal, Members would continue to use ACATS to initiate 
a transfer, Delivering Members would continue to use ACATS to add 
insurance assets to a transfer, and ACATS would validate that the CUSIP 
and Receiving Member are ACATS/IPS eligible. However, the remaining 
processing of the re-registration and transfer of such assets would be 
completed through NSCC's I&RS service. Under the proposed enhancements, 
Receiving Members would receive a notification from I&RS that a broker-
dealer of record change is required in connection with an account 
transfer, the Receiving Member would

[[Page 69000]]

send the broker-dealer of record change directly to the I&RS system, 
I&RS would send data to Insurance Carrier and the Carrier would confirm 
back to I&RS, and I&RS would send a confirmation to the Receiving 
Member.
    In connection with the proposed enhancements, NSCC would 
decommission a number of ACATS instructions, files and records, which 
would no longer be needed when these processes move to the I&RS system. 
This includes, for example, the decommissioning of (i) the Insurance 
Registration (IR) Record, which facilitates the re-registration of 
annuity assets; (ii) the insurance statistics file to confirm accepted 
and rejected transactions by the insurance carrier; and (iii) Receiver 
and Deliver (R&D) Insurance Instructions for IR records that were 
either rejected by the insurance carrier or not completed within twenty 
business days. Eligible assets would continue to be assigned to the 
I&RS services system when both the CUSIP and receiving broker qualify 
for I&RS processing.
    In connection with the proposed changes, NSCC would remove 
references to I&RS Products and certain associated instructions and 
reports concerning I&RS Product transfers from Section 8 of NSCC Rule 
50. Specifically, NSCC would modify Section 8 of NSCC Rule 50 to remove 
references to I&RS Products as products for which a Receiving Member 
must provide detailed transfer instructions through ACATS. Under the 
proposed enhancements, these instructions would be processed through 
the I&RS service and would no longer be processed through the ACATS 
system. NSCC would also modify Section 8 of Rule 50 to delete rule text 
describing the daily issuance of reports by NSCC to the Receiving and 
Delivering Member indicating the I&RS Eligible Products transfers which 
have been confirmed or rejected by the Insurance Carrier/Retirement 
Services Member in accordance with Section 6 of NSCC Rule 57, or which 
have been deleted. These reports would no longer be applicable under 
the enhanced I&RS Product transfer process.
    NSCC notes that the ACATS/IPS service has seen only modest adoption 
and usage since its introduction in 2005. Fewer than ten Members 
currently use the ACATS/IPS service to process transfers of insurance 
products (particularly annuities) through the I&RS services system. 
These Members are also current users of the I&RS service. As NSCC 
continues to modernize its systems, NSCC believes that there is a 
substantial opportunity to improve and refine existing ACATS processes 
and potentially expand the volume of I&RS Products transferred via the 
ACATS platform. As noted above, the proposed change would streamline 
and simplify operational processes for Members by aligning the ACATS 
process for account transfers to the standard operational process used 
for annuity re-registrations in the I&RS service. This in turn may 
reduce the burden of maintaining separate processes for ACATS and non-
ACATS re-registrations and encourage further use of the ACATS platform 
for account transfers. NSCC has performed outreach to Members currently 
using the ACATS/IPS service to inform them of the changes and assist in 
their transition to the new process for transferring I&RS Products.\15\
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    \15\ NSCC has issued Important Notices to Members that contain 
additional details regarding the proposed enhancements available at 
<a href="https://files.dtcc.com/download/assets/a9761-26/a01d4ba4957911f189704ec37e043074">https://files.dtcc.com/download/assets/a9761-26/a01d4ba4957911f189704ec37e043074</a> and <a href="https://files.dtcc.com/download/assets/a9767/a00c1d7a957911f1ad9bc258faf12821">https://files.dtcc.com/download/assets/a9767/a00c1d7a957911f1ad9bc258faf12821</a>.
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Implementation Timeframe
    NSCC would implement the proposed rule change on November 20, 2026.
2. Statutory Basis
    NSCC believes that the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a registered clearing agency. Section 17A(b)(3)(F) of the 
Act \16\ requires that the rules of a clearing agency be designed to, 
among other things, promote the prompt and accurate clearance and 
settlement of securities transactions. NSCC believes the proposed rule 
change is consistent with the requirements of Section 17A(b)(3)(F) of 
the Act for the reasons stated below.
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    \16\ 15 U.S.C. 78q-1(b)(3)(F).
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    As described above, NSCC is working with the industry to enhance 
the account transfer process for I&RS Products by transferring 
responsibility for insurance product registration and confirmation from 
ACATS to NSCC's I&RS services system. Members would continue to have 
the ability to initiate account transfers for I&RS Products within 
ACATS, but ACATS would then pass those assets on to the I&RS system to 
complete the transfer process. The proposed change would streamline and 
simplify the operational processes for Members by aligning the ACATS 
process for account transfers to the standard operational process used 
for insurance product re-registrations in the I&RS service. This in 
turn may reduce the burden of maintaining separate processes for ACATS 
and non-ACATS re-registration and encourage further use of the ACATS 
platform for account transfers. As a result, NSCC believes the proposed 
rule change would promote the prompt and accurate settlement of account 
transfers involving insurance products, consistent with the 
requirements of Section 17A(b)(3)(F) of the Act.\17\
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    \17\ Id.
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(B) Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act \18\ requires that the rules of the 
clearing agency do not impose any burden on competition not necessary 
or appropriate in furtherance of the Act. The proposed rule change is 
designed to streamline and simplify operational processes for Members 
by aligning the ACATS process for account transfers to the standard 
operational process used for insurance product re-registrations in the 
I&RS service. While the proposed rule change would decommission certain 
ACATS functionality used by Members to transfer I&RS Products, those 
Members would continue to have the ability to initiate account 
transfers for accounts containing I&RS Products within ACATS and to 
complete the processing of such transfers using NSCC's I&RS service. 
This simplified process may in turn reduce the burden of maintaining 
separate processes for ACATS and non-ACATS re-registrations and 
encourage further use of the ACATS platform for account transfers. NSCC 
therefore believes the proposed rule change would not impose any burden 
on competition.
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    \18\ 15 U.S.C. 78q-1(b)(3)(I).
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(C) Clearing Agency's Statement on Comments on the Proposed Rule Change 
Received From Members, Participants, or Others

    NSCC has not received or solicited any written comments relating to 
this proposal. If any written comments are received, they will be 
publicly filed as an Exhibit 2 to this filing, as required by Form 19b-
4 and the General Instructions thereto.
    Persons submitting comments are cautioned that, according to 
Section IV (Solicitation of Comments) of the Exhibit 1A in the General 
Instructions to Form 19b-4, the Commission does not edit personal 
identifying information from comment submissions. Commenters should 
submit only information that they wish to make available publicly, 
including their name, email address, and any other identifying 
information.

[[Page 69001]]

    All prospective commenters should follow the Commission's 
instructions on how to submit comments, available at <a href="http://www.sec.gov/rules-regulations/how-submit-comment">www.sec.gov/rules-regulations/how-submit-comment</a>. General questions regarding the rule 
filing process or logistical questions regarding this filing should be 
directed to the Main Office of the Commission's Division of Trading and 
Markets at <a href="/cdn-cgi/l/email-protection#a5d1d7c4c1cccbc2c4cbc1c8c4d7cec0d1d6e5d6c0c68bc2cad3"><span class="__cf_email__" data-cfemail="4b3f392a2f22252c2a252f262a39202e3f380b382e28652c243d">[email&#160;protected]</span></a> or 202-551-5777.
    NSCC reserves the right not to respond to any comments received.

III. Date of Effectiveness of the Proposed Rule Change, and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \19\ and paragraph (f) of Rule 19b-4 
thereunder.\20\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#6f1d1a030a420c0002020a011b1c2f1c0a0c41080019"><span class="__cf_email__" data-cfemail="691b1c050c440a0604040c071d1a291a0c0a470e061f">[email&#160;protected]</span></a>. Please include 
file number SR-NSCC-2026-011 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to file number SR-NSCC-2026-011. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and 
copying at the principal office of NSCC and on DTCC's website (<a href="https://dtcc.com/legal/sec-rule-filings.aspx">https://dtcc.com/legal/sec-rule-filings.aspx</a>). Do not include personal 
identifiable information in submissions; you should submit only 
information that you wish to make available publicly. We may redact in 
part or withhold entirely from publication submitted material that is 
obscene or subject to copyright protection. All submissions should 
refer to file number SR-NSCC-2026-011 and should be submitted on or 
before November 23, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22259 Filed 10-30-26; 8:45 am]
BILLING CODE 8011-01-P


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